A U.S. District Court judge has agreed to a settlement between the Securities and Exchange Commission (SEC), Terraform Labs and its former CEO, Do Kwon, which would have them pay billions in penalties as well as virtually ban them from the crypto industry, according to the court filings.
The settlement approved by Judge Jed Rakoff of the Southern District of New York (SDNY) involves Terraform Labs Kwon paying $4.5 billion in disgorgement and civil penalties while being permanently banned from buying and selling "crypto asset securities," including Terra ecosystem tokens. It's unclear if this also applies to other cryptocurrencies.
This settlement is below the SEC's first offer of $5.3 billion but much higher than the $1 million civil penalty that Terraform first proposed.
Kwon, still in custody in Montenegro awaiting a decision on his extradition, did not appear at the trial where the settlement was reached.
Terraform Labs is currently in Chapter 11 bankruptcy protection, its CEO Chris Amani testified at the trial, and has approximately $150 million in assets on hand.
Edited by Jesse Hamilton.